Graphite electrode export is a very specialized material used for conducting electricity to create high-temperature arcs. Electrodes are also used in many other industries, including lubricants and coatings. The increased use of Li-ion Batteries in mobile phones for cordless tools, electric vehicles and other devices has led to an increase in demand for graphite electrodes. The closure of much of China’s graphite capacity (for environmental purposes) has also reduced the availability of this material in late 2017/early 2018.
Graphite Electrodes are growing because of the need to reduce emissions and energy consumption in the steel production process. GEs are also used to make steel castings, in the manufacture of friction-reducing products for vehicles, as a raw material in graphite catalysts and in the production of refractories.
It is a widely accepted fact that India's Graphite Electrode manufacturers can compete with foreign companies due to lower fixed and administrative costs. India's GEs are produced at a cost of Rs 71,000 compared to the US which is Rs 25,000 and Japan, Rs 99,000. India's GE production has increased.
However, a large number of the domestic producers are unable to meet the growing demand for their products because they are unable to invest in new technology. The industry players are worried that this may lead to a decrease in the market share of Indian companies.
The market for Graphite Electrodes is now being challenged by foreign imports. Globally, Graphite Electrodes are expected to grow at 9.1% a year by 2022. The global growth rate in 2017 was only 4.9%.
Graphite has a wide range of uses, from the production or steel to aluminium and electric vehicle. The pandemic caused disruptions in these industries, which resulted to a decline in graphite demand. The demand for GEs increased as the economy began to recover and businesses resumed operations.
China has dominated the graphite electrodes market on the international level in recent years, mainly due to its low costs and proximity to major markets. This dominance will likely continue, however the major steel makers in Europe and the United States are slowing down their demand. This will increase pressure on the Chinese markets and further volatility in prices. It is a positive move for buyers who can now choose to buy from a variety of sources and countries.
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